Definition
Net burn is cash outflows minus cash inflows in a period (net cash loss). Runway calculations typically use net burn.
Formula
Net burn = cash outflows - cash inflows
Example
If outflows are $500k and inflows are $350k, net burn = $500k - $350k = $150k for the period.
Measured as
Net burn = cash outflows - cash inflows
Operator takeaway
- Tie Net Burn to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
- Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.
Next decision
- Quantify the impact with Cash Runway Calculator if you need to turn the definition into an operating assumption.
- Read Cash runway: how to estimate burn, break-even, and survival time if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.
Where to use this on MetricKit
Calculators
- Cash Runway Calculator: Estimate runway from cash balance, revenue, gross margin, and operating expenses (optionally with revenue growth).
Guides
- Cash runway: how to estimate burn, break-even, and survival time: A practical guide to runway: net burn, gross profit, break-even revenue, and how to avoid common cash planning mistakes.
- Unit economics hub: CAC, LTV, payback, and runway (a practical stack): A practical hub for unit economics: CAC, fully-loaded CAC, LTV, payback, margin impacts, burn multiple, and runway planning.
- Runway and burn: gross vs net burn, working capital, and cash levers: A practical guide to runway: compute net burn, understand why cash differs from profit, and how working capital and collections change runway.
- Pipeline coverage and sales cycle math: set realistic targets (and avoid sandbagging): A practical guide to pipeline coverage: connect quota, win rate, sales cycle length, and CAC/payback constraints to set realistic growth targets.
- Cash conversion cycle: turn working capital into runway: A practical guide to the cash conversion cycle (CCC): how AR/AP timing changes cash, how to reduce days outstanding, and why runway depends on working capital.